Investing in Ketchup

Investing in Ketchup

By www.profitableinvestingtips.com

http://www.profitableinvestingtips.com/

http://www.profitableinvestingtips.com/investing-trading/investing-in-ketchup

As a recipe for success in a slowly growing

economy, a consortium including Berkshire

Hathaway has decided that investing ketchup is

the way to go.



An investment group that includes Berkshire Hathaway is putting up



$28 Billion for a buyout offer for H. J. Heinz

Company, the venerable maker of ketchup.



As the offer stands Heinz shareholders

stand to get $72.50 a share for a stock that was selling for $60 a

share last week.



Heinz has been around for over a century and

makes Smart Ones frozen foods,



Ore-Ida potatoes, and Classico spaghetti

sauces in addition to Heinz ketchup.



The company is headquartered in

Pittsburgh, Pennsylvania.



. It has manufacturing operations on six

contents and produces thousands of different

food products.



According Heinz, over 150 of its brands rank first or second in their class across the globe.



The company sells over half of the ketchup

consumed in the USA and over half of the

frozen potatoes.



The company is a cash cow and has been

expanding into overseas markets which now make up nearly a quarter of sales.



Fundamental analysis of Heinz tells us that the company delivers a

greater than 40% return on equity.


http://www.profitableinvestingtips.com/investing-trading/fundamental-analysis


Investing in Consumer Stocks and

Cash Cows



It is highly unlikely that half of the American public will suddenly

decide to buy different ketchup or frozen

potatoes.



Thus Heinz seems assured to continue its

domination of these food sectors.



This is a company that sells things the people

will continue to buy during bad as well as

good times.



It routinely delivers a profit and, yawn, a

dividend.



Consumer stocks, dividend stocks, stocks

that essentially own their market are great long term investments.


http://www.profitableinvestingtips.com/investing-trading/dividend-stocks


Investing in ketchup, so to speak, is sound

investing.



Berkshire Hathaway and their partners in the

buyout of Heinz seem to think so too.



What Else Do People Like?



Some time back we wrote about

investing in beer. As we said then,


http://www.profitableinvestingtips.com/investing-trading/investing-in-beer


Whether you drink beer or not, investing in beer can be quite profitable.



In looking at the different types of stock

that do well during recessions and profit

during recoveries large brewers typically are on

the list.



Whether your beer of choice is made by Anheuser-Busch or

Inbev,



Molson Coors or Carlsberg these

companies have the capacity to make money

year in and year out.



There also have been a series of mergers and

acquisitions in the brewing business over the years making for

some interesting investments.



Picking new winners with new comers to the business as well as each

reshuffling of the international brewing

business can be profitable when

investing in beer.


http://www.profitableinvestingtips.com/investing-trading/picking-new-winners


Investing in Ketchup



The investing issues for consumer products

companies that routinely return a profit

are twofold.



First of all these are stocks with a high

margin of safety and continual money

makers.



Second, the prices of these stocks are

commonly reflective of the stability of the company and the

constant cash flow.



As such these companies tend to sell

at low PE ratios.



When there is a buyout, as with Heinz, there is a nice bonus to be earned in return for giving up

the stock.



Investing ketchup, beer, and other stable

businesses is typically for the long run.


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Investing in Ketchup